Points Schemes Not Enough to Drive Hotel Loyalty

Local Measure + Skift

- Sep 15, 2016 11:00 am

Skift Take

It’s becoming increasingly apparent that points alone cannot drive brand loyalty. Loyalty is a result of deeper interaction with consumers — and brands who want to succeed will need to transform the way they understand and engage with visitors at their physical venues in the digital realm.

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As hotel guest booking behavior changes, traditional methods of marketing are becoming less effective as a means of encouraging loyalty.

More information is available to travelers than ever before via general travel comparison sites such as Google and booking sites. When consumers approach the booking process, they oftentimes find that similar perks and amenities are available at multiple properties. “When guests no longer see added value in the quality of amenities they receive, the only option to truly differentiate a brand is to develop a strong service culture that makes guests feel special and appreciated” said Rick Garlick, global travel and hospitality practice lead at J.D. Power.

Amenities and perks may help hotels win back some amount of loyalty, but points alone simply will not cut it. According to Hyatt CEO, Mark Hoplamazian in a 2016 Skift interview, “[Hyatt has] recognized that if you conceive of loyalty through the lens of a transactional interaction, then you’re destined to a commoditized future.

If all it is is an organized discounting system: There’s no emotional-based relationship that you can develop out of that. That’s just price.

Increasingly we are rethinking loyalty in a very, very broad way. Not just the program but also what it means to actually extend the sense of our brand and our purpose to those interactions with our guests, and having that be the center of our focus and attention.”

The need to rethink consumer interaction applies across the board, especially for millennials. Adara, a travel data company, surveyed 3,000 travelers for their booking and loyalty behaviors earlier this year. Elizabeth Harz, CMO and president of media for Adara said, “Some 87% of our millennial respondents said that they are travel influencers for their friends and family, meaning that they do research or provide booking assistance for others. I think that’s an interesting nuance for brands to be aware that they’re not only talking to millennials for their own travel, but they have become influential for their extended family and older relatives’ travel as well.”

Understanding the influence that an individual can have on their extended network is an important trend for hotel brands to strategize against. Additionally, increased mobile usage, specifically social, and cheap or free hotel wifi is generating new touch points to reach these influential consumers.

“Guests are sharing on social media about what they like, what they are passionate about or when your service lets them down. Brands can either use this data to take their guest experience to the next level or risk falling behind” says Jonathan Barouch, CEO of Local Measure. Local Measure is a business tool that delivers real time local insight about guests, for example, identifying that a social post made from a specific hotel location is related to the property, and delivering that data to local front line teams who have the ability to influence a customer journey.

On average 20% or fewer social posts actually mention that business by name or use a keyword or hashtag. Location gives context. Even if they did use the word “Hilton” a hotelier wouldn’t gain a lot of insight — there are many Hilton Hotels — so the ability to map guest content and feedback to an individual hotel helps. Especially being that about 80% of feedback on social media goes unseen by brands.

Local Measure conducted a 16 month study that examined 56,000 customers who posted on social media at 75 hotel properties, and found that hotels who engage directly with their guests see a higher return rate among those guests than those guests who aren’t engaged digitally. In fact, they’re 40% more likely to return to the hotel.

This new location-based personalization is a huge opportunity to create modern day loyalty. Not only does it give hotels the ability to surprise and delight guests on-site, but it also gives them the opportunity to respond when things go awry. And when thinking about the impact an influential traveler has on their network, this is key.

In travel, location is everything. More brands should be taking advantage of location based data to improve guest experience and drive brand loyalty — especially when the outcome is more satisfied customers who spend more with the brand.

To find out how Local Measure drives repeat bookings through social, click here.

This content was created collaboratively by Local Measure and Skift’s branded content studio SkiftX.

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